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Latin America leftists slam U.S. on financial crisis

Posted by smeddum on October 1, 2008

Latin America leftists slam U.S. on financial crisis
Tue Sep 30, 2008 5:37pm EDT Reuters
(Adds Lula, context, byline)

By Fernando Exman

MANAUS, Brazil, Sept 30 (Reuters) – Latin America’s leftist leaders on Tuesday accused the United States of “irresponsibility” in its handling of the financial crisis that has pummeled markets and threatens economies around the world.

Venezuelan President Hugo Chavez warned the crisis over credit could slow economic growth across Latin America and took a stab at Washington, predicting that U.S. economic power is in dramatic decline.

“This crash of capitalism and of neoliberalism will be worse than that of 1929,” Chavez told reporters at a meeting with the leaders of Brazil, Bolivia, and Ecuador in Brazil’s Amazon city of Manaus.

“The world will never be the same after this crisis. A new world has to emerge, and it’s a multipolar world,” he said. “We are decoupling from the wagon of death.”

Many Latin American countries depend heavily on exports of commodities, such as oil, soy, copper and bananas, and falling prices combined with tighter credit are raising fears of a sharp slowdown.

“Financing will become more difficult,” Chavez said. “Raw material prices could come down, starting with the price of oil, and including copper, minerals and food stuffs.”

Still, much of the region’s economies will grow above the global average this year, including Brazil at around 5 percent.

It was ironic that rich countries were in crisis and developing countries were sustaining global growth, said Brazil’s President Luiz Inacio Lula da Silva.

“We did our homework and they did not,” Lula said during a joint news conference with Chavez.

With world money markets in trouble, policymakers are hoping the U.S. Congress will quickly revive and approve a $700 billion rescue package that would allow the U.S. Treasury to buy up bad debt from struggling banks.

But Bolivian President Evo Morales, who is a close ally of Venezuela’s Chavez and has nationalized the natural gas industry as part of his socialist reforms, criticized the U.S. plan as a bail-out for the rich.

“In Bolivia, we nationalized for the people to have money, while the United States wants to nationalize debt and a crisis of the wealthy,” Morales said before meeting with Chavez, Brazil’s leader and Ecuadorean President Rafael Correa.

Correa, Morales and Chavez all promote socialist reforms and have been harsh Washington critics. Lula, a former labor leader, has ties with all three but has been much more market friendly and has good relations with Washington.

(Reporting by Fernando Exman; writing by Raymond Colitt; editing by Stuart Grudgings and Kieran Murray)

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